By Max Sato
(MaceNews) – Here are the key Japanese economic and political events for the coming week.
– Sunday, July 20
Voting and vote counting for the House of Councillors general elections. Opinion polls show the ruling coalition led by the conservative Liberal Democratic Party may lose a majority in the upper house, which would be a major blow to the minority government of Prime Minister Shigeru Ishiba. The LDP and Komeito team already suffered a setback in the House of Representatives (lower house) election last year as voters punished the LDP for a series of political funding scandals.
News media are expected to make their calls based on exit polls at 2000 JST (1100 GMT/0700 EDT) on the same day.
– Wednesday, July 23
1030 JST (0130 GMT Wednesday, July 23/2130 EDT Tuesday, July 22)
Bank of Japan Deputy Governor Shinichi Uchida will speak to business leaders in Kochi City, western Japan on the current economic and financial conditions as well as the bank’s policy stance. He is expected to provide a certain guidance on what the BOJ board is likely to discuss and decide at its next meeting on July 30-31 at the speech and a news conference to be held in the afternoon.
A career central banker, Uchida was part of the BOJ’s leadership to conduct large-scale monetary easing for over a decade from 2013 and has now been behind the force to normalize the bank’s policy under Governor Kazuo Ueda who took office in April 2023.
– Friday, July 25, 2025
0830 JST (2330 GMT/1930 EDT Thursday, July 24) The Ministry of Internal Affairs and Communications releases July Tokyo CPI.
Mace News median: total CPI +3.0% y/y (range: +2.9% to +3.3%) vs. June +3.1%; core CPI (ex-fresh food) +3.0% (range +2.8% to +3.1%) vs. June +3.1%; core-core CPI (ex-fresh food, energy) +3.1% (range: +3.0% to +3.3%) vs. June +3.1%
Consumer inflation in Tokyo, the leading indicator of the national average, is expected to have stayed around 3% in July but eased further in light of renewed nationwide retail gasoline subsidies and a plunge in water bills thanks to the city’s free base charge for four months that began in June. Lower inbound spending due to a firmer yen and stricter duty-free shopping rules has also led to lower inflation. Slower energy price gains (gasoline is now down) are partially offset by rising processed food prices in the aftermath of protracted domestic rice supply shortages as well as higher mobile phone charges.
The core reading (excluding fresh food) is forecast at 3.0% on year, slowing further from 3.0% in June and a 28-month high of 3.6% in May. The year-on-year rise in the total CPI is also seen decelerating to 3.0% after slowing to 3.1% in June from 3.4% in the previous two months.
The annual rate for the core-core CPI (excluding fresh food and energy), which is little affected by fluctuations in gasoline and heating oil prices, is expected to be slightly sticker at 3.1% after easing to the level from 3.3% in May.
The current high inflation rate is not backed by domestic demand (wage-heavy services price hikes lag behind goods price gains) but largely pushed up by higher import costs. This means wage growth is not catching up with inflation and thus that underlying inflation, estimated by the Bank of Japan to be around 1.5%, is still below the bank’s 2% price stability target in the long run.
But the Bank of Japan is in the process of normalizing its policy stance after a decade-long large-scale easing period through 2022 and is set to continue gradually raising the overnight interest rate from the current level of 0.5%. Officials argue that real borrowing costs remain “significantly negative” because the BOJ has been cautious about raising rates even when inflation expectations are rising moderately.